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Report: Extended-Stay Room Construction is Down, Occupancy Rises

The report cited in this article in Hotel Business online is developed by the Highland Group every quarter. (Click on the link to read the article.)

Rendering Home 2_Martinsburg_Final_RevA

This nationally-recognized expertise is why Springwood uses Highland exclusively for our extended-stay hotel market studies.

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Site Plan Approved for 115-Room Home2 Suites Hotel in Martinsburg

Rendering Home 2_Martinsburg_Final_RevA

MARTINSBURG, W.Va. — The Martinsburg Planning Commission on Wednesday approved a site plan for a 115-room, extended-stay hotel at Foxcroft Towne Center in Martinsburg.

The Home2 Suites by Hilton, served by 130 parking spaces, is to be built at 800 Foxcroft Ave., where part of the former Martinsburg Mall shopping center once stood, according to site plan documents.

The planning commission’s approval was made contingent on final staff approval and obtaining a National Pollutant Discharge Elimination System (NPDES) permit from the West Virginia Department of Environmental Protection.

“One of the reasons we need to push forward is because (of) loan requirements and obligations to Hilton — dates were promised, and we thought we could meet it based on the old system of approval (that was in place),” said Chad Wallen of Gordon, the consulting firm that prepared the plans for the hotel.

David Hogg, CEO of York, Pa.-based Springwood Hospitality, reiterated at Wednesday’s meeting that he hopes to have the four-story hotel under construction by October.

The project should take about a year from start to finish, Hogg said. Central PA Equities 33 LLC, which is affiliated with Hogg’s company, is the hotel project applicant.

In discussing the project with the planning commission, Wallen agreed that the Foxcroft Avenue commercial district could be made more walkable with more sidewalk connections between existing businesses there.

“We wish there was better interconnectivity all the way up and down Foxcroft,” Wallen said. “One of things that really brought (this hotel) to this site was because they can reach the Chili’s (restaurant and other businesses) on a sidewalk — we’re extending the sidewalk from the hotel up beside (Grand Home Furnishings).”

From there, hotel guests will be able to take a right and follow the sidewalk in front of Hobby Lobby to reach the Chili’s restaurant and others nearby, Wallen told the commissioners.

The addition of the hotel is a continuation of efforts by Foxcroft Towne Center owner Paramount Development Corp. to redevelop the former Martinsburg Mall property.

Grand Home Furnishings and Hobby Lobby have replaced The Bon-Ton and J.C. Penney, former anchors for the mall that closed in fall 2016. The mall opened in 1991.

Since acquiring the former mall in 2013 from Mountain State University Building Co., Paramount has redesigned the retail center to include a cluster of individual pad sites and multi-tenant commercial buildings.

The new hotel is set to join Home2 Suites locations in Charles Town, as well as in Hagerstown and Frederick in Maryland. The Frederick location was also developed by Springwood.

Springwood Hospitality manages more than 750,000 square feet of Hilton and Marriott-branded hotels with about 1,200 guest rooms, according to the company’s website. (…and yes, this is valid. We keep it up to date – Dave Hogg)

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Hampton by Hilton Celebrates Rapid Global Expansion to 2,500 Open Hotels

Hampton by Hilton celebrates its 2,500th open property with the brand’s first hotel in Peru, Hampton by Hilton Lima San Isidro.

MCLEAN, Va. – This month, Hampton by Hilton continues to lead the upper-midscale category worldwide as the brand celebrates its 2,500th open hotel with Hampton by Hilton Lima San Isidro in Peru. The milestone opening demonstrates Hampton’s successful global growth strategy over the past 35 years – high-quality and thoughtfully designed accommodations, award-winning customer service culture and value-added amenities – all backed by the industry-leading 100 percent Hampton Guarantee. Hilton’s largest brand now offers nearly 260,000 rooms worldwide across 27 countries and territories.

And, with more than 700 properties and more than 93,000 rooms in its pipeline – the largest ever in brand history and within the Hilton enterprise – Hampton is helping propel Hilton’s growth during its dynamic 100th anniversary year.

“Hampton by Hilton’s enduring global success as a guest favorite is a testament to the brand’s pioneering nature, high guest service standards and robust expansion efforts,” said Shruti Gandhi Buckley, global head, Hampton by Hilton. “The opening of Hampton’s 2,500th property demonstrates the brand’s winning growth strategy, based on three core pillars: commitment to delivering unparalleled customer service, category leading product and amenity innovation and Hilton’s ongoing investment in the brand.”

A key to Hampton by Hilton’s global success is the brand’s regionalization of hotel prototypes and room designs to meet the diverse needs of its customers. Though each property is unique based on local market-based variations, each stay comes with consistent friendly and thoughtful service, complimentary hot breakfast, free WiFi and a passionate commitment to guest satisfaction backed by the 100 percent Hampton Guarantee, making the brand a favorite for travelers worldwide.

Caribbean and Latin America

Hampton by Hilton is experiencing growth and entering new markets in the Caribbean and Latin America, with four first-in-country openings in the region this year alone. The brand’s celebrated milestone property, Hampton by Hilton Lima San Isidro, is the first Hampton in Peru, situated in the exclusive San Isidro business district and just minutes from the Pacific Ocean. Earlier this year, Hampton debuted in Chile with Hampton by Hilton Antofagasta, featuring spectacular panoramic views of the Pacific Ocean, and Brazil with Hampton by Hilton Guarulhos Airport in São Paulo, conveniently located near Brazil’s busiest airport. Hampton by Hilton Bariloche is set to become Hampton’s first property in Argentina in Q3 and will boast incredible mountain and Nahuel Huapi Lake views at this all-season resort town.

Hampton now offers more than 50 properties and nearly 7,000 rooms across nine countries and territories in the Caribbean and Latin America and aims to add nearly 15 properties and more than 1,750 rooms by 2022, including a first-in-country location in El Salvador, set to open in 2021. Hampton’s growth in the region supports the company’s larger expansion strategy across the Caribbean and Latin America, where Hilton has nearly 150 open properties welcoming guests across 23 countries and more than 90 projects in the development pipeline.

Europe, Middle East and Africa

Hampton by Hilton’s growth extends to Europe with nearly 90 open properties. The brand recently expanded into Belgium with Hampton by Hilton Antwerp Central Station and France with Hampton by Hilton Paris Clichy. Hampton also just announced a partnership with Alshaya Group, where the international franchise operator will develop 70 Hampton properties in nine countries across the Middle East, North Africa and Russia. With the first hotel expected to open in 2021, the Alshaya Group will deliver 50 hotels in the next eight years, with another 20 in the pipeline, significantly expanding Hampton’s presence across three continents.

Asia Pacific

The brand’s tremendous international growth has also occurred in the Asia Pacific region where Hampton by Hilton has achieved 180 percent year-over-year growth, with China catalyzing this rapid expansion, including the recently opened Hampton by Hilton Changsha South Station and Hampton by Hilton Guangzhou Dongxiaonan. Hampton, which opened its first Chinese property in 2015, is now the No.1 fastest-growing international hotel brand in the country just four years later and is set to open its 100th hotel later this year. The brand has a strong pipeline of over 260 signed hotels and 40,000 rooms in China alone.

North America

Hampton by Hilton remains the No. 1 hotel brand across the U.S. and Canada, offering more than 2,250 hotels in all 50 U.S. states, nine Canadian provinces and territories, D.C. and Puerto Rico. On average, major interstate travelers are never more than 30 minutes away from their next Hampton stay in the continental U.S, and with a pipeline of more than 300 properties and 32,000 rooms, that time is sure to shrink. Hampton’s properties stretch to the four corners of the continent with new properties from Hampton Inn & Suites by Hilton Beauport Quebec, down to Hampton Inn & Suites by Hilton Atlanta Decatur/Emory, over to Hampton Inn & Suites by Hilton San Diego Airport Liberty Station and up to Hampton Inn & Suites by Hilton Snoqualmie, Washington.

Hampton has been recognized as the No. 1 ranked lodging franchise for the past 10 years, and one of the top five franchise brands of the 21st century, according to Entrepreneur® magazine.  Hampton continues to lead the category in guest satisfaction as well, awarded top rankings by several consumer, travel and trade publications worldwide. Hampton is part of Hilton Honors®, the award-winning guest-loyalty program for Hilton’s 17 distinct hotel brands, which offers members who book directly through preferred Hilton channels access to instant benefits. Members also enjoy popular digital tools available exclusively through the industry-leading Hilton Honors mobile app, where Hilton Honors members can check-in, choose their room and access their room using a Digital Key.

Read more about Hampton by Hilton’s global expansion at newsroom.hilton.com/hampton or hampton.com.

*Release includes data as of June 30, 2019

About Hampton by Hilton

As the number one ranked lodging franchise for the past 10 years, according to Entrepreneur®Hampton by Hilton, including Hampton Inn by Hilton and Hampton Inn & Suites by Hilton, serves value-conscious and quality-driven travelers at more than 2,490 properties in 27 countries and territories. High-quality accommodations and amenities, such as complimentary WiFi, free hot breakfast, and On The RunTM breakfast bags, contribute to Hampton by Hilton ranking as a leader in its segment. Hampton by Hilton Team Members deliver friendly, authentic, caring, and thoughtful service defined as Hamptonality, with guest happiness being the number one priority, backed by the 100% Hampton Guarantee. Hilton Honors members who book directly through preferred Hilton channels have access to instant benefits. For more information about Hampton by Hilton, visit www.hampton.com or newsroom.hilton.com/hampton, and connect on FacebookTwitterYouTube, and Instagram.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 17 world-class brands comprising nearly 5,900 properties with more than 939,000 rooms, in 114 countries and territories. Dedicated to fulfilling its mission to be the world’s most hospitable company, Hilton earned a spot on the 2018 world’s best workplaces list, and has welcomed more than 3 billion guests in its 100-year history. Through the award-winning guest loyalty program Hilton Honors, more than 94 million members who book directly with Hilton can earn Points for hotel stays and experiences money can’t buy, plus enjoy instant benefits, including digital check-in with room selection, Digital Key, and Connected Room. Visit newsroom.hilton.com for more information, and connect with Hilton on FacebookTwitterLinkedInInstagram, and YouTube.

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What Even is AirBNB Anymore?

tree house versus hotel room

This article by Rosie Spinks on travel site Quartzy is, I believe, an excellent look at the challenges facing the home sharing business ahead of its proposed IPO. Check it out.

Dave Hogg

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U.S. lodging outlook good through 2020

copy-of-home2-suites-by-hilton-york-exterior-1151004

ATLANTA – A favorable economic outlook will lead to continued growth in U.S. hotel revenues and profits through 2020. However, an economic slowdown in 2021 will cause a short-lived softening of lodging industry fundamentals that year. According to the March 2019 edition of Hotel HorizonsCBRE Hotels Americas Research is forecasting U.S. hotel rooms revenue per available room (RevPAR) to increase by 2.5 percent in 2019 and an additional 2.0 percent in 2020.  However, for 2021, CBRE is projecting a slight decline in RevPAR of 0.6 percent. Fortunately for hoteliers, that immediately is followed by 1.4 percent RevPAR growth for 2022.

“In the near-term, the fundamentals of supply, demand and pricing in the U.S. lodging industry are very similar to what we have observed the past few years,” said R. Mark Woodworth, senior managing director of CBRE Hotels Americas Research. “For the most part, the supply of hotel rooms entering the market will be absorbed by newly generated demand buoyed by a healthy economy. Further, while the nominal rate of change may be disappointing, we are projecting average daily rate (ADR) growth above the pace of inflation for 2019 and 2020.”

Gross Domestic Project (GDP) is a good barometer of the overall health of the U.S. economy. CBRE Econometric Advisors is forecasting the pace of GDP growth to be 2.4 percent in 2019, 1.5 percent in 2020, and 0.7 percent in 2021. Given the strong correlation between the health of the economy and travel, CBRE is projecting a commensurate deceleration in the demand for hotel rooms. CBRE forecasts lodging demand to increase by 1.9 percent in 2019 and 1.2 percent in 2020, followed by a decline of 0.1 percent in 2021.

“I would characterize the economic slowdown in 2021 as a blip (an unexpected, minor and typically temporary deviation from a general trend), not a dip (to sink, drop or slope downward). Further, the performance of the U.S. lodging industry in 2021 should be viewed as a slowdown, not a recession,” Woodworth said. “In fact, we see the U.S. hotel market bouncing back strong in 2022 with a 2.5 percent increase in demand.”

ADR Conundrum
Despite the anticipated slowdowns in the economy and lodging demand, the occupancy levels for the overall U.S. hotel market are forecast to remain at an average of almost 300 basis points above the long run average annual occupancy level through 2023. Unfortunately, despite such lofty occupancy levels, ADR growth will fall below inflation in 2021 and 2022.

“We have identified several factors that have muted ADR growth the past few years. These include low levels of inflation, increasing competition from non-traditional forms of lodging and the intervention of intermediary sales channels,” said John B. (Jack) Corgel, Ph.D., professor of real estate at the Cornell University School of Hotel Administration and senior advisor to CBRE Hotels Americas Research.

The Blip
As noted before, CBRE is projecting a 0.6 percent decline in RevPAR in 2021. All chain-scales are forecast to suffer declines in RevPAR during the slowdown, but some will be impacted more than others. “The RevPAR falloff for upper-priced properties is expected to average just 0.8 percent,” Woodworth noted.

“Despite the first indications of a potential softening in U.S. lodging performance, the industry still is forecast to operate at exceedingly high occupancy levels and profit margins. The growth story may not be as strong as hoteliers would prefer, but I would hardly classify hotel sector performance as poor,” Woodworth concluded.

(This article by Tatiana Rokou- with minor edits by Dave Hogg here for brevity – was published February 27, 2019 in TravelDailyNews.com)

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Hilton CEO says direct marketing paid off in 2018

Hilton CEO Christopher Nassetta emphasized in the recent quarterly investor call that the company’s Hilton Honors investment is now paying off with record guest loyalty.

A Travel Weekly article about the quarterly call notes that Nassetta says Hilton Honors has not only grown in size but also in level of engagement. He estimated that five or six years ago, just 15% to 20% of total Hilton Honors members could be categorized as “engaged,” with recent stay or purchase activity. Today, nearly 50%, or 42 million Hilton Honors members, are considered engaged.

Read the entire Travel Weekly Article

Dave Hogg

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CBRE: Hospitality Industry Growth to Continue in 2019

homewood-suites-by-hilton-frederick-exterior-1080853Note: This article is reproduced from a November 28, 2018 article in Hotel Management online by Elliott Mest

Due to a continued upswell in the U.S. economy, CBRE Hotels’ Americas Research is forecasting a strong performance for U.S. hotels in 2019, anticipating a 10th consecutive year of growth.

In its December 2018 edition of “Hotel Horizons,” CBRE anticipates U.S. hotel occupancy will increase to 66.2 percent in 2018, a fifth straight record level for the industry. Occupancy will receive a boost from an anticipated 2.1 percent increase in demand, overcoming an estimated 1.9 percent net increase in supply for the year.

“It all starts with the demand for lodging accommodations. Without leisure, corporate and group travelers on the road seeking hotel rooms, there is no need to worry about all the other performance metrics,” R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research, said in a statement. “From 1988 through 2017, the average annual gain in accommodated room nights in the U.S. was 2 percent. For 2018 and 2019, we believe demand growth will exceed this long-run average.”

Hospitality professionals turn to Operations as their go-to source for breaking news on guest rooms, food & beverage, hospitality trends, management, and more. Sign up today to get news and updates delivered to your inbox daily and read on the go.

After analyzing data through the third quarter of 2018, CBRE Econometric Advisors, CBRE’s in-house source for the economic forecasts that drive its models, issued an upward revision to its outlook for U.S. gross domestic product in 2018 and 2019.

The improvement in the CBRE-EA economic forecast is based on the remaining impact of the fiscal boost from tax-law changes, capital spending, improving wage growth and consumer confidence. “We have already seen the positive influence these factors have on the economy, and lodging industry, in 2018. The impact will persist in 2019,” John B. (Jack) Corgel, professor of real estate at the Cornell University School of Hotel Administration and senior advisor to CBRE Hotels’ Americas Research, said in a statement.

“Given the upward revision to the economic forecast, our projections for 2019 growth in demand have risen from the 1.9 percent figure presented in our September 2018 report to the 2.1 percent in the current December 2018 report. The direct result is a boost in our 2019 projected occupancy level from 66.1 percent to 66.2 percent,” Woodworth said in a statement.

Market Forecasts

While lodging demand for the entire U.S. market is forecast to increase 2.1 percent in 2019, the demand for accommodations in the 60 markets covered by CBRE is projected to grow 3.3 percent. This is significant because the majority of hotel investment activity occurs in the nation’s largest cities. Supply growth in the 60-market Hotel Horizons universe (3.6 percent) is forecast to be almost double that of the nation as whole (1.9 percent).

“Supply is expected to grow at a greater pace than demand in 65 percent of our Horizons markets during 2019. However, despite the surge in new competition in these preferred markets, all 60 will enjoy an increase in [average daily rate]. In fact, we are forecasting ADR increases greater than the projected 2.2 percent pace of inflation in 39 of our 60 markets,” Woodworth said. Jacksonville, Fla.; San Jose-Santa Cruz, Calif.; San Francisco; Newark, N.J.; and Atlanta are all lodging markets forecast to enjoy 4.4 percent or more ADR growth in 2019.

“Despite the continuation of demand growth and record occupancy levels, concerns persist about the level of room-rate increases. To that, I direct people’s attention to the pricing dynamics we are seeing at the local level,” Corgel said. “Looking at the Hotel Horizons market data, we find a correlation between the occupancy level, changes in occupancy and changes in ADR. In short, markets with the greatest increases in ADR are those with the highest occupancy levels and strongest changes in occupancy. It is apparent that property-level operators in high-performing markets are taking advantage of the basics of supply and demand when setting their room rates.”

Beyond 2019

With so many consecutive years of record occupancy levels and demand growth, hotel owners and operators worry about the inevitable time when this period of extended prosperity will come to an end. After all, lodging is a cyclical industry.

CBRE is not forecasting any economic or lodging industry recessions through 2022. However, industry growth is forecast to curtail beyond 2019. CBRE-EA expects higher interest rates, equity market corrections, credit-market problems and some shrinkage in employment as risk factors occurring in late 2019 and 2020 adversely affect the lodging industry in 2021. Fortunately, the economic slowdown is expected to be relatively mild and short.

“The year 2021 seems far away for most industry participants; however, those with an ownership interest need to be planning their future investment strategies. In the meantime, the magnitude of profit growth may not be spectacular, but the probability for revenue growth is solid, and operating margins remain well above historical levels,” according to Woodworth.

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